The Government of Ontario says it will raise its tax on non-resident homebuyers if the federal government in Ottawa fails to keep an election promise to clamp down on speculative foreign buying in Canada’s housing market.
The provincial government says it is prepared to raise the “Non-Resident Speculation Tax” (NRST) to 20% and expand its catchment area beyond the Greater Toronto Area (GTA).
Ontario’s foreign homebuyers tax currently stands at 15% and was implemented in 2017 to help curb speculative buying by foreigners that has driven up home prices across the province.
In this year’s federal election, the incumbent Liberal Party promised to ban foreign home purchases in Canada for a period of two years, but no further details have been released since they were re-elected in September.
Meanwhile, Toronto area home prices hit an all-time high for the third straight month in November, and rural regions of Ontario have also experienced rapid growth in home prices.
The Ontario government will be looking for details of the federal government’s housing plan when federal Finance Minister Chrystia Freeland releases Ottawa’s economic and fiscal update and warned if there’s no indication the ban will be implemented, the province will begin taking action on its own at the beginning of next year.
